"The State Government has withdrawn the award," Social Welfare Minister Geeta Bhukkal said.
The government had honoured Jaswanti, whose NGO Bharat Vikas Sangh runs the scandal-hit Apna Ghar shelter home, with the Indira Gandhi Mahila Shakti award at a state-level function in Jhajjar in March. The award carried Rs one lakh as cash prize and a citation.
The Government today also terminated her membership from the Juvenile Justice Board, Rohtak.
Jaswanti had also received a national award last year for helping the destitute in Haryana.
Jaswanti's shelter home had landed into a controversy when a team of National Commission for Protection of Child Right (NCPCR) rescued over 100 children and women who were allegeldy sexually abused from the house after carrying out a surprise raid in Rohtak on May 9.
During the raid it was found that the women and children at the shelter home were allegedly sexually assaulted and tortured including by police officials.
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Jaswanti along with her son-in-law, daughter, brother cousin and two others have already been arrested.
She has been booked for offences under Immoral Trafficking (Prevention) Act 1956, Bonded Labour Act and Juvenile Justice (Care and Protection) Act and other sections of the IPC.
Bhukkal said that all the children who were lodged at the shelter home that was sealed by the authorities last week, had been shifted to another place.
The Government had on Wednesday constituted a Special Investigation Team to inquire into the entire episode in which involvement of several state policemen has been alleged.
The Punjab and Haryana High Court had also constituted a four-member committee of lawyers to inspect various shelters in the state identifying cases of sexual abuse or torture.